G-20 deal clinched at last moment: Pranab

Chandra Shekhar
Gyeongju (South Korea), Oct 24 (PTI) The deal to reform
the International Monetary Fund (IMF) to give greater clout to
developing nations like India and halt aggravation of the
ongoing currency war was struck at the last moment at the
conference of G-20 finance ministers and central bank
governors here.
The uncertainty continued till the last minute and it was
only in the wee hours yesterday that officials, after
intensive overnight negotiations, managed to put together a
communique that was acceptable to all 20 countries.
"Till this (Saturday) morning, the situation was really
uncertain. It was clinched in the meeting of G-7 and BRIC
finance ministers," Indian Finance Minister Pranab Mukherjee
told reporters.
While the G-7 represents the interest of industrial
countries, the BRIC club comprises emerging economies like
Brazil, Russia, India and China. The differences persisted
mainly over ways to deal with the ongoing currency crisis.
According to officials, nothing was achieved in the first
session of the two-day conference that began on October 22, as
differences between the developed and emerging nations
continued.
However, during the intervening sessions, BRIC finance
ministers, who have emerged as an important pressure group
advocating the cause of emerging economies, met and decided to
extract the maximum that they could and conclude the deal.
"In between (the two sessions), the BRIC finance
ministers met. Ultimately, when we resumed, it was decided we
will have... (the deal)", Mukherjee said.
Officials involved in the negotiations said that talks
continued for the whole night and the draft was redone several
times before the communique, reflecting the collective views
of the G-20 members, was given a final shape.
The communique spelled out a decision to give more voting
power (quota share of 6 per cent) to emerging nations in the
IMF, while asking nations to move towards "more" market-
determined exchange rates and desist from "competitive
devaluation" of currencies.
It reflected the viewpoints of both the US as well as
China on the currency issue. The US wants China to appreciate
its currency, the yuan, in line with market realities, a move
that is being resisted by Chinese government as it might hurt
exports.
Seeing no end to the currency war in sight, some other
countries, including Japan, decided to devalue their currency.
The communique, a carefully negotiated document, incorporated
the US point of view by asking countries to move towards "more
market-determined exchange rate systems that reflect
underlying economic fundamentals." MORE PTI